InvestorQ : Hi Diksha, what is your view on the market trend for Tuesday 07th of June, ahead of the RBI policy tomorrow?
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Hi Diksha, what is your view on the market trend for Tuesday 07th of June, ahead of the RBI policy tomorrow?

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diksha shah answered.
8 months ago
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On Monday, Nifty opened weak and slipped further. However, later in the day, it staged a smart recovery in the second half to close about 15 points lower. Banks and metals were the big recovery stories which helped the markets to rally from lower levels in the latter half of the day. Of course the jitters ahead of the RBI policy are still there.

In terms of the market micro stricture, the breadth of the Nifty as measured by the advance decline ratio was negative at 21:29 on Monday. Gainers were from the auto and metals with the lead role in gainers played by Bajaj Auto. Cement is nearing 52 week lows as Ultratech, Grasim and Shree Cements stayed under pressure due to the supply glut fears.

Foreign investors net sold equities of Rs.2,398 crore as domestic funds and LIC bought stocks worth Rs.1,940 crore. June looks to be another month of FPI selling. In global markets, Dow and the NASDAQ were marginally higher helped by Amazon while Europe showed sharp gains. SGX Nifty is down 120 points on rate hike expectations in early trades.

In terms of your query on the outlook, the worries are over the policy meet of the RBI which will result in the monetary policy announcement on 08th June. A 50 bps hike in repo rates is factored in but a sharp CRR hike will mean lower liquidity. Also, watch out for negative cues on the large NBFCs as they could face a lot of pressure on their compliance costs in coming quarters. Cement is likely to remain under pressure for the near future.

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